By Ian Fried of CNET News.com . . .

Internet service provider Prodigy Communications plans to start selling a $199 Web-surfing appliance from the New Internet Computer Co., according to a source familiar with the deal.

Under the terms of the deal, expected to be announced in coming days, Prodigy will sell the Linux-based Web device, known as NIC, offering those who buy the device three months of Internet service for the price of one. Prodigy is in the process of being acquired by telephone company SBC Communications.

The 20-person NIC Co., which is majority owned by Oracle Chief Executive Larry Ellison, projects profitability by next month, in part because it has so few employees and spends little marketing its devices to consumers. The company has focused on deals with institutions such as hotel chains.

In June, the San Francisco-based company inked a deal with Sun to jointly market to schools the NIC with Sun's Cobalt Qube 3 server appliance.

The NIC is one of the last survivors from the flurry of devices launched since early 2000. Gateway last month stopped selling the Connected Touch Pad it developed with America Online. Sony scrapped its eVilla two months after it debuted, while Netpliance and 3Com also stopped selling their devices.

Compaq still sells its iPaq Home Internet Appliance, a $299 device that connects to Microsoft's MSN Internet service.

Copyright © 2001 CNET Networks, Inc. All rights reserved. Used with permission.

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